Let AE = Aggregate Expenditures, C = Consumption, I_P =

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment,
G = Government Purchases. Consider a simple aggregate expenditures model, where
AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. In this model, the slope of the AE curve is the

A) MPC and the multiplier is 1 ÷ (1 - MPC) .
B) MPC and the multiplier is 1 ÷ MPC.
C) multiplier and the multiplier is 1 ÷ MPS.
D) MPC and the multiplier is ∆AE ÷ ∆Y where Y = real GDP.